Beleaguered rail commuters are facing their annual kick in the teeth. Today you’ll find out how much more a ticket will cost next year. Inflation figures released today will be used by the rail industry to calculate January’s rises.
Consumer groups will be up in arms. Unions will once again hold this up as a banner of how private capital fails. There’ll be a steady stream of figureheads demanding change and saying enough is enough.
In one sense, it’s absolutely bonkers that train price increases are linked to the retail price index (RPI). This higher rate hasn’t been this country’s official measure for more than eight years. Not for the first time, the railways are open to criticism of being gravely behind the times.
Linking fares to the consumer price index (CPI) instead would give passengers some reprieve. Roughly speaking, using it would save a tenner on the price of a £1,000 season ticket. The problem is, such a change upsets a delicate financial equilibrium.
Wages and pensions, borne by the train companies, are linked to RPI. Switching to CPI would mean asking trade unions to stomach a pay cut, or demand that rail companies make less profit. Alternatively, the Government could step in and increase its subsidy to the railways, to fund a lower fare rise – or indeed a fare freeze.
But here we come across another problem. The Tories are adamant that the rail user, rather than the taxpayer, ought to pay for Britain’s train network, and they’ve worked hard to get there. In 2010/11, 57pc of the cost came from passengers. By 2017/18, this had grown to 75pc.
Conveniently, however, these statistics exclude the cash that has already been splashed on the High Speed 2 (HS2) train line (you know, that £100bn line that might not even go ahead?).
Add this into the mix and government support for the railways jumped by half to £6.4bn. In absolute terms, this is the highest single year of spending since the railways were privatised, according to regulator the Office of Rail and Road.
The amount spent on HS2 in 2017/18 was £2.1bn. It’s a project that already employs 9,000 people. One can’t help but feel that they’ve got rather carried away with spending already.
Nowhere is this brought into sharper focus than a quick glance down the register of central government civil servants who are paid more than £150,000. Best-paid is HS2 chief executive Mark Thurston, who takes home a cool £615,000. That’s plenty more than Andrew Haines the boss of Network Rail (a man who actually has a railway to manage) gets.
There are 489 civil servants on the list; 55 – yes, more than a tenth – have HS2 jobs. Aggregate pay among them is around £11m, meaning on average their annual salary is more than £200,000. HS2’s communications director Tom Kelly, a former Tony Blair spokesman, is this country’s 20th best-paid civil servant, taking home £280,000. Neil Hayward, HS2’s recruitment chief, isn’t far behind – he’s on £255,000.
For context, General Sir Nick Carter, Chief of the Defence Staff, is on £255,000. Take a deep breath and think: the head of this country’s armed forces gets £25,000 a year less than the HS2 spinner-in-chief.
So the sad truth of it is this: if the Government was minded to use taxpayer funds to soak up today’s fare rise, it can’t. It has spent the money on HS2.
Some may argue that the train companies shouldn’t make any money. And those racking up losses deserve to rack up more. However much we might take pleasure in seeing train operators get squeezed, it won’t help commuters in the long run.
Amid all manner of turmoil, the Government is already making preparations for around a quarter of rail franchises to be renationalised. Private companies cannot be expected to shoulder mammoth losses that are the result of ministers moving the goalposts and asking them to take the pain. Push them too hard and Jeremy Corbyn’s dream of a nationalised British Rail utopia could be realised via the back door.
So there we have it: there’s no way of stopping rail fares rising. The Government found a magic money tree for the railways, and has promptly spent it: on HS2. It’s time this administration was more transparent than the previous one; it’s time they dumped any claims that they’re pushing the financial burden from the taxpayer to the rail user.
And no matter whether you think HS2 is a good or bad thing, it’s time ministers admitted it is the real reason ticket prices are going up today.